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PA Bulletin, Doc. No. 18-1029

NOTICES

PUBLIC SCHOOL EMPLOYEES' RETIREMENT BOARD

Actuarial Tables

[48 Pa.B. 3929]
[Saturday, June 30, 2018]

 The act of December 20, 1995 (P.L. 689, No. 77) (Act 77) amended 24 Pa.C.S. § 8502(h) and (j) (relating to administrative duties of board) to require the Public School Employees' Retirement Board (Board) to publish in the Pennsylvania Bulletin the actuarial tables used by the Public School Employees' Retirement System (PSERS) in calculating annuities and other benefits. The Board adopted the following actuarial tables at its June 10, 2016, meeting. The actuarial tables are effective July 1, 2018. Accordingly, these actuarial tables are being published as required by Act 77.

GLEN R. GRELL, 
Executive Director

 The following material provides general information and actuarial tables for computing an estimated regular (nondisability) retirement benefit from PSERS. Also, included as Table 6 is the Present Value of $1 Annuity Using Disability Mortality table.

General Information

 A vestee or any other eligible member upon termination of school service who has not withdrawn his accumulated deductions may apply for and elect to receive either a maximum single life annuity (MSLA) or a reduced annuity (Reduced MSLA) certified by the actuary to be actuarially equivalent to the maximum single life annuity and in accordance with one of the options under the Optional Forms of an Annuity section of this document. Optional forms of an annuity are considered to be ''actuarially equivalent'' if they have the same present value (PV) as the PV of the maximum single life annuity. A Class T-E or Class T-F member may not receive an annual benefit, calculated as of the effective date of retirement, greater than the member's final average salary.

 A vestee who retires on or after attaining superannuation age is entitled to a ''normal'' annuity, also known as a superannuation or full annuity, where no age or service-related adjustments (for retiring early) are applied to the MSLA.

Superannuation or normal retirement age is defined by Membership Class as:

Membership Class Age
T-A 62 or any age upon accrual of 35 eligibility points (service credits)
T-B 62
T-C and T-D 62 provided the member has at least 1 eligibility point or age 60 provided the member has at least 30 eligibility
points (service credits), or any age upon accrual of 35 eligibility points
T-E and T-F 65 with accrual of at least three eligibility points or a combination of
age and eligibility points totaling 92, provided the member has accrued at least 35 eligibility points

 A vestee who retires prior to attaining superannuation age is entitled to an ''early'' or ''withdrawal'' annuity, where the MSLA is reduced due to retiring early. This early retirement reduction is based on how far away from superannuation age the member is on the effective date of retirement.

 A key component in the computation of a PSERS' retirement benefit is the final average salary (FAS). PSERS' retirement code defines final average salary as the highest compensation received as an active member for any three nonoverlapping periods of 12 consecutive months. Compensation for part-time service is annualized on the basis of the fractional portion of the school year for which credit is received. This period is frequently the most recent three fiscal years.

Calculating the MSLA

 Calculating all forms of a (nondisability) retirement benefit begins with calculating the MSLA.

 For Class T-C members, the MSLA is calculated as:

MSLA = 2.0% × Total Class T-C
Service Credits
×FAS × Early Retirement Factor*

 For Class T-D members, the MSLA is calculated as:

MSLA = 2.0% ×Total Class T-C Service Credits ×FAS ×Early Retirement Factor*
+ 2.5% ×Total Class T-D Service Credits ×FAS ×Early Retirement Factor*

 For Class T-E members, the MSLA is calculated as:

MSLA = 2.0% ×Total Class T-E Service Credits ×FAS ×Early Retirement Factor*

 MSLA is limited to 100% of FAS.

 For Class T-F members, the MSLA is calculated as:

MSLA = 2.5% ×Total Class T-F Service Credits ×FAS ×Early Retirement Factor*

 MSLA is limited to 100% of FAS.

 *Except for superannuated members and members who have attained age 55 and have 25 or more service credits, the Early Retirement Factor can be found in Table 3 Early Retirement Factor—Unisex. The Early Retirement Factor for members who have attained superannuation age is 1.0, which results in no reduction. The reduction for those members who have attained age 55 and have 25 or more service credits is equal to 1/4% multiplied by the number of months, including a fraction of a month as a full month, by which the effective date of retirement precedes superannuation age.

Calculating the Present Value of the MSLA

 As previously noted in the general information section, optional forms of an annuity are considered to be ''actuarially equivalent'' to the MSLA if they have the same PV as the PV of the MSLA.

 The PV of the MSLA is calculated as:

PV of the MSLA = MSLA ×PV of $1 Annuity on the Effective Date of Retirement*

 *See Table 1 Present Value of $1 Annuity—Unisex

Optional Forms of an Annuity

 Acceptable optional forms of an annuity are:

Option 1.—A life annuity to the member with a guaranteed total payment equal to the PV of the MSLA on the effective date of retirement with the provision that, if, at his death, he has received less than such PV, the unpaid balance shall be payable to his beneficiary. The Option 1 Annuity is made to be actuarially equivalent to the MSLA by applying an Option 1 Reducing Factor, which is based on the age of the member as of the effective date of retirement, to the MSLA.

 The Option 1 annuity is calculated as:

Option 1 Annuity = MSLA ×Option 1
Reducing Factor*

 *See Table 2 Service Option 1 Reducing Factors—Unisex

Option 2.—A joint and survivor annuity payable during the lifetime of the member with the full amount of such annuity payable thereafter to his designated survivor annuitant, if living at his death. The Option 2 Annuity is made to be actuarially equivalent to the MSLA by applying an Option 2 Reducing Factor, which is based on the age of the member and the age of the designated survivor annuitant as of the effective date of retirement, to the MSLA.

 An Option 2 annuity is calculated as:

Option 2 Annuity = MSLA ×Option 2
Reducing Factor*

 *See Table 4 Factors for Obtaining Annuities and Pensions Under Option 2—Unisex

Option 3.—A joint and 50% survivor annuity payable during the lifetime of the member with one-half of such annuity payable thereafter to his designated survivor annuitant, if living at his death. The Option 3 Annuity is made to be actuarially equivalent to the MSLA by applying an Option 3 Reducing Factor, which is based on the age of the member and the age of the designated survivor annuitant as of the effective date of retirement, to the MSLA.

 An Option 3 annuity is calculated as:

Option 3 Annuity = MSLA ×Option 3
Reducing Factor*

 *See Table 5 Factors for Obtaining Annuities and Pensions Under Option 3—Unisex

Option 4.—Some other benefit certified by the actuary to be actuarially equivalent to the MSLA, subject to the following restrictions:

 (i) Any annuity shall be payable without reduction during the lifetime of the member.

 (ii) The sum of all annuities payable to the designated survivor annuitants shall not be greater than one and one-half times the annuity payable to the member.

 (iii) A portion of the benefit may be payable as a lump sum, except that such lump sum payment shall not exceed an amount equal to the accumulated deductions standing to the credit of the member. The balance of the present value of the maximum single life annuity shall be paid in the form of an annuity with a guaranteed total payment, a single life annuity, or a joint and survivor annuity or any combination thereof but subject to the restrictions of subparagraphs (i) and (ii) of this paragraph. This option is often referred to as Special Option 4 Partial Lump Sum Withdrawal.

 Prior to Act 5 of 2017, the previous subparagraph did not apply to a Class T-E or Class T-F member. Act 5 of 2017 was passed in June of 2017. Under this legislation, effective immediately, Class T-E and Class T-F members are eligible to elect a ''cost-neutral'' Special Option 4 Lump Sum distribution of all or a portion of the member's accumulated contributions at retirement. The term ''cost-neutral,'' as applied to any lump sum withdrawal attributable to contributions credited to the member's savings account of Class T-E or Class T-F members, together with statutory interest thereon, shall mean equal present values, computed on the basis of the interest rate and such mortality and other tables as adopted by the Board in effect on the effective date of retirement of the member.

 The most common form of Option 4 is that described in subparagraph (iii). The reduction to the MSLA on account of a Partial Lump Sum Withdrawal is calculated as:

Special Option 4 Partial Lump Sum Withdrawal Reduction = Partial Lump Sum Payment Amount / Present Value of
$1 Annuity*

 *See Table 1 Present Value of $1 Annuity—Unisex for Class T-C and Class T-D members. See Table 1A Present Value of $1 Annuity—Unisex 7.25% for Class T-E and Class T-F members.

 The Special Option 4 Partial Lump Sum Withdrawal Annuity is calculated as:

Special Option 4 Lump Sum Withdrawal Annuity = MSLA Special Option 4 Partial Lump Sum Withdrawal Reduction

 Other forms of Option 4 must also be actuarial equivalent to the MSLA and are calculated by PSERS' actuary.

Combining Optional Form 1, 2 or 3 of an Annuity with the Special Option 4 Partial Lump Sum Withdrawal

 When combining Optional Form 1, 2 or 3 of an Annuity with the Special Option 4 Partial Lump Sum Withdrawal, the annuity is calculated as:

Annuity = Special Option 4 Lump Sum Withdrawal Annuity ×Appropriate
Option (1, 2 or 3) Reducing Factor*

 *See Table 2, 4 or 5 as appropriate, based on the Option.

Actuarial Tables for Regular (Non-Disability) Retirements
(Adopted June 10, 2016; Effective July 1, 2018)

Table 1
Present Value of $1 Annuity—Unisex

Age Unisex Age Unisex Age Unisex
51 18.069 81 7.946
22 22.981 52 17.825 82 7.560
23 22.885 53 17.574 83 7.179
24 22.785 54 17.317 84 6.806
25 22.681 55 17.051 85 6.440
26 22.574 56 16.780 86 6.085
27 22.461 57 16.500 87 5.741
28 22.345 58 16.214 88 5.409
29 22.224 59 15.920 89 5.090
30 22.098 60 15.619 90 4.787
31 21.968 61 15.311 91 4.502
32 21.832 62 14.995 92 4.233
33 21.692 63 14.671 93 3.981
34 21.546 64 14.340 94 3.744
35 21.394 65 14.003 95 3.519
36 21.237 66 13.657 96 3.305
37 21.073 67 13.305 97 3.107
38 20.903 68 12.947 98 2.920
39 20.727 69 12.583 99 2.745
40 20.544 70 12.213 100 2.584
41 20.354 71 11.839 101 2.436
42 20.158 72 11.459 102 2.301
43 19.953 73 11.076 103 2.177
44 19.741 74 10.690 104 2.063
45 19.522 75 10.300 105 1.958
46 19.296 76 9.909 106 1.862
47 19.061 77 9.516 107 1.781
48 18.818 78 9.122 108 1.696
49 18.567 79 8.728 109 1.598
50 18.307 80 8.336 110 1.525

Table 1A
Present Value of $1 Annuity—Unisex @ 7.25%
Special Option 4 Lump Sum Factors
For Class T-E and Class T-F Members

Age Unisex Age Unisex Age Unisex
51 12.414 81 6.695
22 13.991 52 12.315 82 6.415
23 13.972 53 12.211 83 6.134
24 13.952 54 12.102 84 5.856
25 13.930 55 11.987 85 5.579
26 13.907 56 11.867 86 5.306
27 13.882 57 11.741 87 5.038
28 13.855 58 11.610 88 4.777
29 13.827 59 11.472 89 4.523
30 13.796 60 11.328 90 4.278
31 13.764 61 11.177 91 4.046
32 13.729 62 11.019 92 3.825
33 13.692 63 10.854 93 3.616
34 13.653 64 10.682 94 3.417
35 13.611 65 10.502 95 3.228
36 13.566 66 10.315 96 3.045
37 13.517 67 10.121 97 2.875
38 13.466 68 9.919 98 2.714
39 13.411 69 9.709 99 2.560
40 13.352 70 9.492 100 2.419
41 13.289 71 9.268 101 2.289
42 13.223 72 9.037 102 2.169
43 13.151 73 8.800 103 2.059
44 13.075 74 8.555 104 1.956
45 12.995 75 8.305 105 1.861
46 12.909 76 8.049 106 1.775
47 12.818 77 7.787 107 1.701
48 12.721 78 7.520 108 1.624
49 12.618 79 7.248 109 1.533
50 12.509 80 6.973 110 1.465

Table 2
Service Option 1 Reducing Factors—Unisex

Age Unisex Age Unisex Age Unisex
51 0.9686 81 0.7944
22 0.9978 52 0.9668 82 0.7816
23 0.9978 53 0.9648 83 0.7680
24 0.9977 54 0.9627 84 0.7534
25 0.9976 55 0.9604 85 0.7390
26 0.9975 56 0.9581 86 0.7243
27 0.9974 57 0.9554 87 0.7082
28 0.9973 58 0.9527 88 0.6927
29 0.9971 59 0.9497 89 0.6781
30 0.9969 60 0.9466 90 0.6614
31 0.9967 61 0.9432 91 0.6460
32 0.9963 62 0.9395 92 0.6321
33 0.9960 63 0.9356 93 0.6189
34 0.9956 64 0.9313 94 0.6043
35 0.9950 65 0.9267 95 0.5907
36 0.9944 66 0.9218 96 0.5781
37 0.9937 67 0.9167 97 0.5670
38 0.9929 68 0.9109 98 0.5526
39 0.9920 69 0.9048 99 0.5393
40 0.9910 70 0.8985 100 0.5277
41 0.9898 71 0.8916 101 0.5178
42 0.9884 72 0.8842 102 0.5101
43 0.9869 73 0.8766 103 0.4986
44 0.9852 74 0.8683 104 0.4879
45 0.9833 75 0.8594 105 0.4791
46 0.9812 76 0.8504 106 0.4727
47 0.9789 77 0.8405 107 0.4694
48 0.9764 78 0.8297 108 0.4633
49 0.9735 79 0.8189 109 0.4525
50 0.9704 80 0.8071 110 0.4408




Table 6
Present Value of $1 Annuity Using Disability Mortality

Age Unisex Age Unisex Age Unisex
51 14.925 81 6.513
22 20.440 52 14.707 82 6.222
23 20.303 53 14.488 83 5.938
24 20.164 54 14.267 84 5.660
25 20.020 55 14.043 85 5.391
26 19.869 56 13.816 86 5.130
27 19.711 57 13.585 87 4.878
28 19.548 58 13.348 88 4.635
29 19.380 59 13.106 89 4.401
30 19.207 60 12.857 90 4.175
31 19.030 61 12.600 91 3.960
32 18.851 62 12.335 92 3.753
33 18.668 63 12.062 93 3.557
34 18.482 64 11.781 94 3.369
35 18.292 65 11.492 95 3.189
36 18.099 66 11.197 96 3.014
37 17.900 67 10.895 97 2.849
38 17.697 68 10.587 98 2.695
39 17.490 69 10.276 99 2.549
40 17.278 70 9.961 100 2.413
41 17.064 71 9.643 101 2.285
42 16.847 72 9.324 102 2.166
43 16.629 73 9.004 103 2.055
44 16.412 74 8.684 104 1.951
45 16.198 75 8.365 105 1.855
46 15.990 76 8.047 106 1.766
47 15.780 77 7.732 107 1.688
48 15.569 78 7.421 108 1.617
49 15.356 79 7.113 109 1.556
50 15.141 80 6.811 110 1.504
[Pa.B. Doc. No. 18-1029. Filed for public inspection June 29, 2018, 9:00 a.m.]



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